Godrej Consumer international arm supports Q4 show, brokerages retain bullishness

The Ebitda margin continues to grow year-on-year despite increased investments on media, it said

Godrej Consumer's fourth quarter earnings exceeded expectations, as increasing domestic volumes and better-than-expected international growth kept brokerages bullish.

The consumer staples player reported a total revenue of Rs 3,385.61 crore, rising 6 percent from Rs 3,200.16 crore a year ago.

GCPL also recorded a loss for the quarter at Rs 1,893 crore for the March quarter against a net profit of Rs 452 crore. The profit was impacted by a large one off expense, which were largely non-cash in nature. Majorly, the reorganisation in the Africa business impacted the bottomline at Rs 2,378 crore.

The net profit without the exceptional and one-off items came to Rs 574 crore, higher by 22 percent on-year.

Also Read | Godrej Consumer posts consolidated net loss of Rs 1,893 crore in Q4

Godrej Consumer has completed the reorganization in its East-Africa business. This will lead to a positive impact on the net profit of Rs 50 crore per annum, despite having a negative impact of Rs 470 crore on the revenue per annum.

The domestic revenue grew 12 percent on-year, seeing 15 percent volume growth.

Brokerage Emkay Global said the company's better international show drove the EBITDA and PAT beat. The overall international revenue decline by two percent, compared to the brokerage's estimates of 10 percent.

The international EBITDA saw a healthy grow growth of 34 percent, with a 16 percent EBITDA margin. The Indonesia business outperformed, while the GAUM (the Africa, the US and the Middle East region) cluster's revenue declined 23 percent, impacted by the reorganisation.

International brokerage Jefferies said that the earnings show from Godrej beat its estimates, while clocking industry-leading volume growth in soaps and double-digit volume growth in emerging categories.

Godrej Consumer Product's further initiatives should help drive volume and value growth, added the brokerage.

Jefferies retained its buy call on the Cinthol-maker, with a price target of Rs 1,520 per share. This indicated an upside of around 21.6 percent from the previous session's closing level.

Nuvama Institutional Equites also maintained its buy rating and target price of Rs 1,455 steady.

Over the past one year, Godrej Consumer shares gained 30 percent. In comparison, the benchmark index Nifty 50 rose 23 percent during the same time.

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